How to Use Behavioral Nudging to Improve Your Company Culture

Instituting a behavior science-based approach, like "nudging," when designing and developing company culture can lead to more impactful results.

Colleagues fist bumping each other.

The concepts and strategies behind building company culture have been overdue for change for some time. For decades, when people spoke of company culture, they talked about their employees being friends outside of work and a near therapy-like communication style at teambuilding retreats. However, as I’ve seen firsthand within the organizations I have worked with, coworkers forming personal friendships doesn’t positively affect productivity or necessarily increase employee satisfaction.

While it helps to like the people you work with, friendships do little to build a desirable company culture. What defines a positive company culture, impacts the corporate bottom line, as well as improves overall employee satisfaction is how the collective leadership and employees of an organization behave during the course of conducting their day-to-day business—things like how they address conflict, make decisions, and solve problems together.

Instituting a behavior science-based approach when designing and developing company culture can lead to more impactful results, bolstering productivity and employee retention. One technique that can positively improve company behavior is “nudging.” This approach to company culture building seeks to change behavior not through demands or forced friendship but through signals that create a subconscious behavioral change.

Studies have shown that a series of small prompts can “nudge” people to act in their best interest in the workplace. I have observed the radical changes that can “stick” with creative approaches to behavioral nudging.

Getting Away from “Kum-ba-yah”

Some time ago, I was working for a big-name client. In an attempt to build team cohesion and stoke productivity, the company had us sit in a circle, and each shared a deeply personal story. The thought process behind these exercises was that an emotional connection between team members would result in a productive, well-connected team.

However, there’s no proof that being vulnerable and personal with fellow team members positively affects productivity or necessarily makes employees “happier at work.” If anything, it can make for some uncomfortable situations when broken boundaries seep into the workplace. Behavior nudging, however, does not use any of that. Instead, it works in direct contrast to the “emotional” enforcement of positive collaboration, which, in the long run, works better to lead employees toward long-term change.

The “nudge” concept was popularized by behavioral economist Richard Thaler and legal scholar Cass Sunstein in 2008 upon the release of their book called “Nudge: Improving Decisions About Health, Wealth, and Happiness.” Before 2008, the concept of behavioral nudging was bandied about by academics and economists as far back as 1995. However, the “nudge theory” application in the workplace is still in its infancy. The more “kum-ba-yah” approach to teambuilding has taken some time to fall out of favor, despite the proof of its ineffectiveness.

Applying Behavioral Nudging

Company culture is defined by behavior while conducting day-to-day business. How leaders can change corporate behavior for the better is based on behavioral science, including nudging.

Nudging seeks to change behavior without authoritatively or directly telling people what to do. Instead, nudging crafts small experiments aimed at changing mindsets on a subconscious level.

As a practical example of behavioral nudging, I worked with a client who ran a socially responsible and health-conscious business. She became concerned when she noticed her employees were not making healthy choices with their lunches and snacks, witnessing an overabundance of soda drinking and potato chip snacking.

Instead of demanding that her employees eat healthy while in the office—an approach that was sure to not only ruffle feathers but likely fail miserably—this client chose a behavioral nudging route. She identified a health food company that could come in and offer healthy lunch options for her employees at a great price (negotiated for the company). She also stocked the office with healthier snack and drink options readily available to employees at no charge.

There was no demand to follow the healthier route, but with the “nudge” in the right direction toward those options, the behavior was changed. A year after the initial “nudge,” that client’s office is staffed by bonafide health nuts.

Subconscious change remains, and the behavioral nudging approach also protects employees’ freedom to choose.

Considerations Before Nudging

Stoking productivity and building cohesive teams within an organization can be complex. Leaders who are considering using behavioral nudging to influence employee behavior positively should consider a few points before putting their plan into action:

  • Current behavior: Leaders should analyze the current behavior of their employees. What behavior does leadership wish to change through behavioral nudging? What are the reasons behind the current behaviors?
  • Nudging without manipulation: Nudging can only be viewed as manipulative if it’s too heavy-handed or applied under false pretenses. Leaders should focus on subtlety and not be overly disruptive to an employee’s workday. If nudges become demands that seek to push people toward behaviors they are adamantly against, it is no longer considered “behavioral nudging.”

Thaler and Sunstein described it well in their book: “Any aspect of the choice architecture that alters people’s behavior predictably without forbidding any options or significantly changing their economic incentives… The intervention must be easy and cheap to avoid counting as a mere nudge. Nudges are not mandates. Putting the fruit at eye level counts as a nudge. Banning junk food does not.”

Leadership should always keep in mind their end goal before trying behavioral nudging. In a rapidly changing workplace, moving away from a more “let’s all be friends” avenue to a “let’s all collaborate effectively” avenue —through behavioral nudging— speaks to the current mindset of modern employees. By providing easy, attractive options and still considering employee autonomy, long-lasting positive change can be achieved.

Amira elAdawi is founder and CEO of AMIRA & CO. She is an external advisor to Bain & Co, previously the senior principal at Booz & Co, and has assisted several Fortune 100 companies through M&As.